BY RACHEL CHEESEMAN
SALEM- In response to the $560 million shortfall in Oregon’s state budget, Governor Ted Kulongoski plans to proceed with his “reset” by implementing a 9 percent budget cut across the board.
The governor said he is “not a fan of across the board cuts,” but they were the only option available, considering the magnitude of this year’s shortfall.
“I have learned – and am convinced – that in a situation like this, the best response is swift and decisive action,” Kulongoski said. “Difficult times call for difficult actions.”
The budgets for the Department of Education and the Department of Human Services will be cut by about $252 million and $154 million, respectively. In addition, the Oregon University System’s budget will be cut by about $31 million, the agency for community colleges and workforce development by about $20 million, and the Department of State Police by about $10 million.
The governor said that while many might expect him to call a special legislative session to rebalance the budget, he would not do so, saying it would be “pennywise and pound foolish.”
“The politics at this time is not conducive to people sitting down and making good policy decisions,” he said, referring to the upcoming election season.
Shortly after the governor’s announcement, Senator Ted Ferrioli, R-John Day, sent out a press release calling for a special session, saying it would be better to “do the job right with a scalpel” than let the governor cut the budget with a hatchet.
Senator Peter Courtney, D-Salem, who served in the Senate during past recessions, said that a special session would be effective only if there were more financial resources available in revenue, rather than relying almost entirely on the emergency, reserve and rainy day funds. Currently, the reserves contain about $175 million.
Rep. Dave Hunt, D-Clackamas, said more information about the impact of cuts on different agencies must be available before the allocation of reserve money can be decided.
“We have to assess the impact of these cuts and ameliorate the effects of the worst cuts,” he said.
Hunt even mentioned cutting funding for entire agencies to refocus dollars on the services they are intended to improve, naming the Commission on Children and Families specifically, which receives approximately $25 million.
“Those are the kinds of decisions we’re going to have to make,” he said.
The governor also announced that he intends to extend the pay freeze for state employees to June 2011 and asked the Public Employees Benefit Board (PEBB) to reduce its cost increases from 10 to 5 percent this year, saving about $50 million together. The governor said he hopes to “deliver savings while preserving as many jobs as possible.”
“A 9 percent cut is significant and will most certainly lead to layoffs,” Kulongoski said. “But layoffs should be the last possible alternative.”
Hunt said the legislature intends to maximize federal money and continue its “laser light focus” on job creation to minimize the negative effects of this budgetary shortfall and speed up the growth and recovery Oregon’s economy has been experiencing. While these growth rates have been a welcome change of pace for Oregon, they have not been enough to overcome the heavy blow dealt by the recent recession in the latest fiscal year.
“I think getting people back to work is the fundamental answer,” he said.
